China's Foreign Reserves Rise to $3.438 Trillion as Dollar Slides, Gold Buying Hits 22 Straight Months

China's foreign exchange reserves rose to $3.438 trillion at the end of August, up $19.55 billion, or 0.57%, from July's $3.419 trillion, according to data released Monday by the People's Bank of China and reported by the State Administration of Foreign Exchange. That beat the $3.425 trillion economists surveyed by the Wall Street Journal had forecast, and topped the $3.425 trillion consensus in a separate Reuters poll.

The reserves remain the largest in the world by a wide margin. The move came alongside a weaker U.S. dollar. Reuters reported the greenback weakened 0.4% against a basket of major currencies during August, while Xinhua put the U.S. dollar index's August decline at 0.5%, closing the month at 99.4. The yuan gained 0.49% against the dollar over the same period, according to Reuters.

Wen Bin, chief economist at China Minsheng Bank, told Xinhua the dollar's weakness produced a "positive valuation effect" on China's reserves, since a chunk of those reserves are held in non-dollar assets that appreciate in dollar terms when the dollar falls. Wen also predicted China's exports will "maintain strong resilience going forward," pointing to what he called a global manufacturing upswing driven by AI-related capital spending as a tailwind for Chinese trade.

Xinhua's framing leaned heavily on that upbeat script, quoting the State Administration of Foreign Exchange's statement that China's economy has "remained generally stable and made solid progress" with "resilience and vitality supporting the stability" of reserves. That's Beijing's official line. Morningstar's coverage, sourced to Dow Jones Newswires, offered a sharper counterpoint: the same data landed "against the backdrop of a weaker dollar and a surging trade surplus, renewing concerns about the yuan's appreciation," and came as policymakers worldwide weigh new trade barriers against what they call unfairly subsidized Chinese exports. Morningstar also noted the yuan is "widely considered undervalued" by outside observers, a tension Xinhua's report didn't address at all.

The Gold Number Underneath the Headline

The People's Bank of China added 650,000 troy ounces of gold in August, according to the State Administration of Foreign Exchange, extending its buying streak to 22 consecutive months, the longest run on record. That topped July's addition of 640,000 ounces, which had itself been the largest single-month purchase since October 2023.

Total Chinese gold holdings now stand at 76.73 million troy ounces, roughly 2,386.57 tonnes, up from 76.08 million ounces in July. The reported dollar value of those holdings rose to $350.08 billion from $306.35 billion a month earlier, though most of that $43.7 billion jump reflects gold's price gain during the month rather than new tonnage. Gold traded near $4,395 an ounce Monday, down about 0.8% on a session with U.S. markets closed for Labor Day.

Twenty tonnes a month is not a large slice of global supply. Mine production hit a record 3,672 tonnes in 2025, meaning one month's Chinese purchase runs under 1% of annual output. The signal is the consistency, not the size. China has bought gold every single month for nearly two years straight, through a stretch when the metal hit a record above $5,500 in January, fell close to 30% to the low $4,000s by late June, and has since recovered into the $4,300s. A central bank buying through that kind of swing isn't chasing price. It's executing an allocation plan on a calendar that doesn't care what happens week to week.

Gu Fengda, chief analyst at Guoxin Futures, described China's accumulation as "a highly strategic and forward-looking deployment of reserves, not a short-term trade." That view lines up with broader central bank behavior. The World Gold Council's 2026 Central Bank Gold Reserves Survey found 89% of central bank respondents expect global official-sector gold reserves to keep rising over the next 12 months, and a record 45% expect their own institution's holdings to increase, the highest share since the survey began.

The backdrop is a slow-moving retreat from the dollar as the world's default reserve asset. According to the IMF's latest Currency Composition of Official Foreign Exchange Reserves data, the dollar's share of global central bank reserves has fallen from roughly 72% in 2000 to about 57% today, with gold and other assets absorbing the difference. China isn't the only central bank buying gold, but it's running the longest documented streak, and it isn't showing signs of stopping.

China's General Administration of Customs is scheduled to release August trade data Tuesday, which will show whether the export strength Wen Bin cited actually materialized in the month's numbers, or whether the reserve gain was mostly a currency and asset-price story rather than a trade one.